Capital District - NY Estate & Elder Law

Long-Term Care? The Discussion Should Not Be Avoided

 The older one gets, the more expensive the insurance becomes and that is, if it is still available.

The possibility of needing long-term care can be a thought that one would like to avoid. However, the truth is it should be discussed and taken into consideration in retirement planning, according to CNBC in “Plan ahead to protect your family and your fortune from this retirement risk.”

Consider this: in 2018, the national median annual cost of a semiprivate room in a nursing home was $85,775. A home health aide in 2017 cost $49,192. That’s not small change.

So how do you prepare for long-term care costs?

Start planning now. The earlier in your life that you purchase a long-term care insurance policy, the more likely you’ll be able to afford to buy one. As you get older, they get more expensive—if you can even purchase them at all.

Where would you want to receive care? If you have a choice, would you rather have someone come to the house for a few hours to help, or would you prefer to move to an assisted living facility? Both have costs.  However, figuring out which one you’d prefer (if you have a choice), will help in the planning process.

You can now purchase more than just the traditional long-term care program. There’s also a hybrid cash-value life insurance policy or you can self-insure, if you have the cash on hand.

Who will be making your medical decisions? Have your estate planning attorney put a healthcare directive in place—designating a trusted person who will make decisions about your medical care if you should become unable to do so.

Who will make your financial decisions? Your estate planning attorney will most likely also create a power of attorney for you. This must be someone who you trust, someone good with handling money and making decisions and who can take over paying bills and managing your household budget, if you can’t.

Both these people may never be called upon to act—but if they are, you and your family will be in much better shape. Make sure to discuss your choices for health care and finances with these individuals.

In some cases, particularly when it comes to the financial power of attorney, a bank or a professional advisor may be a good choice. They have certain reporting requirements and may be a less emotional choice than a family member.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.

Reference: CNBC (Aug. 22, 2018) “Plan ahead to protect your family and your fortune from this retirement risk”

 

Have Young Children? Estate Plan Is a Priority

 

 

 

Many young families with small children do not have estate planning at the top of their list. However, it really should be a top priority, according to The Daily Sentinel’s in “What is missing from your estate plan?”

Some information in estate planning that should be known is a last will and testament. It is the document which parents need to legally nominate guardians to rear their children, if orphaned. While some people name one person to rear the children and handle the money, it’s a good idea to separate the two roles.

Without these instructions in a will, those left behind can have very different ideas about where the children should live and who should care for them. If the two parent’s families have very strong opinions, suddenly both families have hard choices to make about what will happen to the children.

No parent wants to leave a legacy of court battles and family division.  However, that’s what is likely to happen without a will.

There are other issues that estate plans address while you are alive.  It is also necessary to plan for incapacity. A living will, also known as an “advance directive,” is important because it helps pre-answer questions, regarding what treatment and care you would want if unable to speak for yourself. Do you want to be kept alive by artificial means? You do not want your loved ones making this decision during a time of great emotional stress, so this is an important document to have in your estate plan.

Finally, your estate plan should include a medical durable power of attorney to deal with all other medical decisions other than end of life. Without it, if you are not near death but not able to share your opinions about your care, your family and your medical providers are placed in a difficult position. In contrast, those who care enough about their family designate an agent and ensure that their wishes are made legally binding.

The big question everyone must face is “When should I start working on my estate plan?” If the answer is “Later,” then the real answer is “No time soon.” For young parents, that puts your minor children in a bad position, where a court may make the decision about who will rear them and how their lives will go on after you are gone.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances, including families with young children.

Resource: The Daily Sentinel (Aug. 12, 2018) “What is missing from your estate plan?”

 

 

There are Many Reasons and Uses for an Estate Plan

 

Why should you have an estate plan? There are many reasons and many goals, including providing for your spouse and children, as well as dealing with a family business, minimizing tax liabilities and naming the people you want to act on your behalf when you’re gone, according to the Brainerd Dispatch in “Wealth Column: Estate Planning Basics,”

So, what do you need? First, you’ll need a will, which is the basic tool for estate planning. It prevents two very expensive and stressful issues: managing your wishes for your estate and possibly losing hefty sums through unnecessary taxes.  However, that’s just the start.

You may also need trusts, depending on your family’s situation. You’ll want to have life insurance policies with beneficiaries. Life insurance proceeds are not governed by the will, so your heirs will receive any funds directly. Benefits from retirement funds fall into this same category. That’s why making sure that your beneficiary designations are up-to-date, is so important.

Working with a team of trusted advisors, is productive for most people. Remember that your estate plan touches on taxes and investments as well as your will, power of attorney and medical directive. Consider these steps to get your entire estate plan in order:

• Gather personal data about yourself and your family,
• Create a balance sheet of your assets and liabilities,
• Review your will and any existing trusts,
• Evaluate all estate tax options, such as the best method of disposing of your share of community property—considering the unlimited marital deduction and the use of tax-sheltered trusts,
• Consider the optimal way to distribute your retirement plan benefits,
• Calculate potential estate, gift and income tax liabilities,
• Determine the availability of liquid assets to meet potential estate expenses and taxes.

An estate planning attorney can work with the information you have gathered to create an estate plan that fits your unique circumstances.

Resource: Brainerd Dispatch (Aug. 3, 2018) “Wealth Column: Estate Planning Basics”

 

 

Family Meetings Can Be Helpful and Productive

 

 

An elder member of the family sometimes needs caregiving. If it is a family project, it can be easier, according to aPlaceforMom.com  in “Guide to Elder Care Planning & Family Meetings.” That effort will take a family meeting, as well as including paid caregivers in the planning process.

Sharing information and airing different ideas can be productive. One family member might feel like they are carrying the whole load, while others feel like they want to do more but aren’t sure what. It’s typical for siblings or others to feel like they are doing more than their share: talk it out, so everyone is taking some part of the responsibility.

These roles are often influenced by culture or gender. Caring for a frail older person is not easy.  However, the same strong person who could easily mow mom’s lawn, will be uncomfortable helping with bathing and toileting.

At least three and at most 10 people should be invited to the meeting. We have some cultural taboos, such as discussing death and dying in front of a person.  However, respecting their desire to be part of that conversation is very important. If they don’t want to be involved, respect that as well.

Direct caregivers should be included. The woman who comes to clean weekly may be aware of certain behavioral changes that an every-other-week visitor would not. Family members might also want to include a spiritual advisor, if the person is a member of a faith-based community.

Every family is unique, and some may benefit from the services of a social worker or gerontologist.

Set an agenda and stick with it. Topics will depend on the situation, such as moving to a different residential setting, the use of alert systems and health care transportation.

An elder law attorney can guide you through the process.

Reference: aPlaceforMom.com (January 2018) “Guide to Elder Care Planning & Family Meetings”

 

 

 

 

 

Healthcare Costs Can Be Shocking in Retirement

 

 

The fear of huge medical bills causes worry to many a retiree.  However, there is hope of solving the situation.

Retirees generally fear that a medical expense shock will decimate their savings.  However, there are ways to make the shock less stressful, according to Reuters in “How to shockproof your retirement healthcare costs.”

Brightwork Partners discovered in a national survey that as many as four out of five boomers agreed that they are worried about this.  However, they are too confused by all the details to actively plan for medical costs during retirement.

Help is on the way from national retirement researchers and investment companies. While most retirement healthcare research focuses on the big picture, like Fidelity’s recent estimate that a couple is likely to spend $280,000 on healthcare costs in retirement, a new study from Mercer Health and Benefits and Vanguard Research got a lot more granular.

The goal of the study is to develop a model that can be used by people before they retire, so they can create a budget that includes this admittedly staggering number. This model will be able to help set necessary saving goals and plan on how to achieve the goal.

An average 65-year-old woman retiring and using Medicare in 2018 will need $5,200 to pay for medical expenses. That’s including Medicare, additional health insurance and out-of-pocket costs. By 85, the cost jumps to $10,100 annually, or, for a less healthy person, $14,000. As they age, people need more health care and researchers say we should consider “healthcare inflation” as starting at 6.6% annually, with a rate of 4.5% over time.

Before retiring, experts say people need to be honest with themselves about their health and the costs that will ensue. If they have chronic illnesses like diabetes, cancer, heart disease or arthritis, they need to expect to spend more than the average amount.

The biggest medical care shock to retirement savings is long-term nursing home care.  However, these researchers found that only one in seven will face those costs for two years or more.

Think about these issues in advance and prepare for the costs. 

Reference: Reuters (July 11, 2018) “How to shockproof your retirement healthcare costs”

 

 

 

You Only Think You Don’t Need an Attorney

 

 

 

The ease of writing your own will or downloading some forms from the Internet, can make you jump to the conclusion that you don’t need professional assistance. There are many reasons why you really need an attorney, according to the Huntsville Item in "Do you really need an estate planning attorney?"

Those reasons include:

• The estate planning attorney knows about property law and how different types of property are handled differently by courts. If you do not get this correct in your will, your estate can face difficulties.
• There are different types of estate planning documents that do different things. Estate planning attorneys can help you pick the right ones for your unique circumstances.
• Estate taxes are still a concern at the federal level for many people and in several states. A professional is needed to properly plan around them.
• The attorney can also help craft your estate plan in a way that compliments your other financial goals, often including paying less in taxes.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.

Reference: The Huntsville Item (May 21, 2018) "Do you really need an estate planning attorney?"

 

 

Medicare and Medicare Advantage Compared

  

Recently, some researchers looked at the quality of care that traditional Medicare enrollees receive versus Medicare Advantage enrollees, according to ElderLawAnswers in "Are Medicare Advantage Plans Steering Enrollees to Lower-Quality Nursing Homes?"

It turns out that Medicare Advantage enrollees on average, enter nursing homes that score worse on quality control metrics than traditional Medicare enrollees. The study did not examine the reasons for the discrepancies. However, it is important that this study be pursued, so policy makers can make sure that all seniors receive high quality care.

Medicare Advantage enrollees or their families should do their own investigation into nursing homes, before deciding upon one.

Reference: Elder Law Answers (April 16, 2018) "Are Medicare Advantage Plans Steering Enrollees to Lower-Quality Nursing Homes?"

 

 

Leaving the Hospital? You Need a Plan

 

Medicare requires that a plan for care be developed with a social worker when a patient is about to be discharged and also for them to understand the plan.  But just taking the word of the social worker isn’t always advisable, according to the Pittsburgh Post-Gazette in "Doublecheck when they say the rehab center doesn't have room."

The patient might need to be transferred to another facility, such as a nursing home or a rehabilitation center. The patients are sometimes told that their preferred facilities for care after being discharged from the hospital do not have room for them. Sometimes that is true, but not always.

Hospitals that have financial interests in other facilities very often try to steer patients into those facilities and away from others. For that reason, it is a good idea for patients and families to call facilities for themselves to ask about availability.

An elder law attorney can advise you, should you believe it is possible that the hospital is not doing what Medicare requires it to do.

Reference: Pittsburgh Post-Gazette (Feb. 26, 2018) "Doublecheck when they say the rehab center doesn't have room."

 

 

Cost of Longer Life Span May Be Inheritances

 

In wealthy countries, the idea of leaving an inheritance is in jeopardy and may become a distant memory for middle class families, according to the Financial Times in "Opinion Today: The end of inheritance."

 

Receiving even a small inheritance from parents, allows families to build up some wealth. That wealth can, in turn, be left as inheritances for their children.

The article is about the situation in the U.K..  However, the issues in the U.S. are the same.

The overall population is aging. The elderly are living much longer than in previous years. This increases the cost of providing care for the elderly population. There are not enough younger people paying taxes to make up for the increasing costs.

When political leaders have proposed addressing the issue, they have been punished by voters, who do not want changes to the elder benefits they have been promised.

At some point, the issue does need to be addressed.

Reference: Financial Times (Dec. 23, 2017) "Opinion Today: The end of inheritance."

 

Are Pensions Becoming Extinct in the U.S.?

 

Many companies in the U.S. did away with pension plans for their employees in the 1970s and switched to 401(k) plans, according to the Washington Post in "'I hope I can quit working in a few years': A preview of the U.S. without pensions."

401(k)s were supposed to make it easier for people to retire.

The idea was that employees could have their own investment account. They could put their money into the accounts and many employers matched the amount put in.

The system was entirely voluntary. That is where the problem came in.

Over the years, most people have not put nearly enough into their accounts. As a result, they do not have enough money to retire.

That leaves many elderly people now working long after they had hoped to leave the workforce, because Social Security does not provide enough money to live on.

Reference: Washington Post (Dec. 23, 2017) "'I hope I can quit working in a few years': A preview of the U.S. without pensions."